berkeleyinvestmentgroupfandomcom-20200213-history
Positions
This is a portfolio of all of BIG's current positions. AAPL Investment Thesis Market domination, cheap valuation on a P/E ratio, disruptive, innovative products, lots of room for expansion in PC market, cult following. $100 billion of cash to shareholders in the next few years. Positive Catalyst Continued earnings beats and growth in iPhone and laptop business. iPhone remains dominant smart phone Negative Catalyst market saturation; some better product from a competitor comes along; bubble bursts Hard Things To Watch For lower: p/e of 13 - $550 scale back at 615 If it's above $580 going into earnings, scale back by 2 shares BLK Investment Thesis Blackrock is a passive investing leader as investors are shifting towards passive investments. Electronic trading of bonds will make passive bond products more popular in the future. Positive Catalyst customers switching to blackrock due to the new bond trading platform. money continues to switch from quant side into asset side Negative Catalyst competitors launch own software. Revenue from bond trading system not substantial. unable to get satisfactory returns on its $4T in assets so people move elsewhere Hard Things To Watch For Bond trading platform seems relatively immaterial. model depends a lot on yearly returns and exit multiple. Hard stop at 25% MKL Investment Thesis Markel is the premier niche insurance carrier that underwrites with more discipline than their peers. However, investors do not understand Markel and pay attention to insurance earnings rather than the investment earnings that run through the balance sheet not the income statement. Therefore Markel is Undervalued Positive Catalyst Hard market develops an stock doubles Negative Catalyst soft market remains, MKL begins underwriting insurance at a loss. look for combined raio higher than that of its peers to sell Hard Things To Watch For Current price to book is 1.1, which is near all time low of 1.056. Add 4 more shares any price below 430 NOV Investment Thesis The recession and drop in oil prices temporarily decreased rig demand. With momentum for rigs now returning, NOV’s position as a leader in rig manufacturing ensures its growth and profitability. Positive Catalyst oil prices stay relatively high. Orders for new rigs continue to increase Negative Catalyst Oil prices drop, backlog cancels, revenue declines in the rigtech segment Hard Things To Watch For 25% hard stop out TRIB Investment Thesis The sell side is under estimating sales potential and therefore driving the stock down. Management guidance is above these estimates and there is no foreseeable reason management estimates can not be achieved Positive Catalyst Negative Catalyst Hard Things To Watch For New Saliva AIDS test from competitor means decreased sales in Africa,. However, new test is much less accurate and TRIB still market leader in tests. Uncomfortable adding more just because it is so illiquid that it would be hard to sell a larger position quickly VOD (Completed) Investment Thesis VOD is intrinsically undervalued due to data and emerging market revenue growth. There is a high probability of a sale of VZW in the near future due to Verizon Communications insistence on forcing a transaction. Positive Catalyst Verizon restarts the dividend to VOD or VZW IPOs or VZ buys VOD stake in VZW. international mobile phone share increases Negative Catalyst none of the positive catalysts happen. competitors are dominant in emerging markets mobile phone markets Hard Things To Watch For NXTM Investment Thesis The market is undervaluing NXTM in the potential of home hemodialysis, a clinically superior and more convenient therapy to in-center hemo. Long-planned marketing strategies, especially their "Centers for Excellence" program, should continue to increase adoption. CMS reimbrusement change in 2013-14 would be an extremely strong catalyst Positive Catalyst Medicare changes reimbursement for home hemodialysis training, which will remove the incentive for dialysis centers to avoid marketing home hemo Negative Catalyst Home hemo sales growth does not materialize by 4Q13 and FY14 (ie: stays at 6-7% yoy), marketing expense rise very quickly without corresponding sales growth Hard Things To Watch For Continue to keep up with the news regarding information on home hemo - clinical trails, CMS/physician comments, etc. GLOG Investment Thesis Long-term day rates will stay above $80k due to insufficient shipping capacity to support skyrocketing liquefaction capacity. GLOG is investing heavily into ships that will be signed at higher day rates than the market expects. Expiring contracts will rollover at a higher rate than analysts expect as well. Our view is variant because we think liquefaction will grow faster than the market thinks. Positive Catalyst Excercise options for new ships, purchase other new ships, buyout from Teekay/Golar/BG Group Negative Catalyst Long-term delays in liquefaction construction Hard Things To Watch For V Investment Thesis Visa will continue to take payment share away from checks and cash payment types at an accelerated pace due to new technologies including Square and Verifone mobile. Furthermore, Visa will rapidly grow EPS due to operating leverage from the sales, marketing, and expense line. These factors will drive EPS. Positive Catalyst Continued payment share expansion, especially with a greater portion taken away from cash. Operating Margin expansion via operating leverage on the sales and marketing expense line. Negative Catalyst Inability for Square to take market share away from cash. Verifone missing a quarter, which would reflect overall lower card transactions. Increased litigation revolving around credit cards interchange fees. Hard Things To Watch For Overall transactions for Visa >3B Declining OMs, which is per recent guidance, would take a significant portion of EPS growth away. CHKP Investment Thesis Dominant industry position will allow the company to fend off PANW, FTNT, and FIRE. Shift to "blade" model will allow them to increase gross margins and sell more services to customers. Should show product rev growth in late 2013-2014 on easy comps. Trading at $6.5 billion ex-cash and generating $850 million FCF annually. Positive Catalyst Continued earnings growth, share buybacks, and cash flow growth as they switch to a service based model rather than product heavy. PANW, FIRE, FTNT report dissapointing results Negative Catalyst Decrease in implied bookings (rev+change in deferred revenue) Hard Things To Watch For Lower attach rate of blades onto the firewalls and slowing service revenue growth would be a signal to think about selling the company. ESRX Investment Thesis Medco Merger has left ESRX in a pwoerful position and they should be able to leverage that and get pricing power over others in the supply chain Positive Catalyst Continued margin and earnings growth. Earnings beats mostly Negative Catalyst can't get as much pricing power as initally thought. If margins contract, it would be determental to the thesis Hard Things To Watch For margins increasing as thesis is realized. If margins decrease, we should be exiting the position UHAL Investment Thesis Fleet growth is highly accretive to earnings. Additionally, UHAL's extensive dealer network will allow it to continue to take market share from competitors. Home values will drive more of the population to move. There is also tremendous value locked in UHAL's self-storage segment that is not priced into the stock. Positive Catalyst Increasing fleet size and market share gains will allow UHAL to beat earnings. Negative Catalyst Management does not grow fleet at 5%, competitors begin to take market share. Hard Things To Watch For Thesis will play out as more of the population owes less than their homes are worth. Continued fleet growth (at 5%+), 900+ location additions, and market share gains should also be watched. Additionally, the value of the U-Boxes program should be watched for its potential. Initiate 2% position at $175, 5% at $170, 7% at $166